Retail: Coming… Ready or not!
by Michael Smollan. There's a mad scramble on every continent to table a multi-, omni- and digital channel strategy and fund it.
by Michael Smollan. COVID-19 has not changed the future, it has merely made ‘coming, ready or not’ a reality and accelerated us into it. The mad scramble to now table a multi-, omni- and digital channel strategy and fund it, has become apparent on every continent. In boardrooms big and small, the anxiety is palpable and knee jerk reactions through this period, happening left, right, and centre.
One of the bi-products of the race to bed down an omni-channel offering is the convergence of retailer positionings. Once upon a time, retailers ‘owned’ certain channels and formats. It was a point of differentiation where 7-Eleven were the kings of convenience; Walmart the doyennes of discount; and Marks & Spencer’s, Woolworths and the like, the connoisseurs of premium supermarkets and department stores.
As retailers elevate their presence across formats, both online and offline it will become harder to allow for this distinction as they start to play in one another’s respective spaces. Consider Amazon, the Alibaba Group and the various online marketplaces, playing not only across formats, but building entire ecosystems of enhanced assortments and services. It’s safe to say that retailers will have a harder time carving out and maintaining these unique spaces to play in. Furthermore, following the initial post pandemic push, take for example the likes of shifting attention patterns and perhaps, changing gender roles with the demand for convenience. It becomes evident that across all levels clear positioning, a relevant value proposition, and an even more aligned partnership with clients, will be critical. Elements will have to constantly be tailored to suit the business model nuances and needs of the different retail formats.
Shifting attention patterns
Research indicates that with consumers now absorbing information from so many mediums, it is making it even more difficult to hold their attention. This was already the case pre-pandemic, so coupled with the last few months, it is evident that content created must be highly engaging and able to be viewed quickly to capture attention. However, at the same time it has allowed for more touchpoints with users. These shifting patterns will not only reshape how people absorb information; but will create high expectations for seamless digital operations and force tactic differentiation when engaging with a younger, digital native generation versus older consumers.
To this end, Unilever is partnering with Alibaba to unlock deeper insights into consumer behaviour by leveraging a range of Alibaba cloud technologies, including machine-learning and AI, to help anticipate future consumer and trends. And, as Covid saw sales of non-essential categories plummet, luxury clothing brand Burberry turned to social commerce to leverage the livestreaming hype via TikTok – making them one of the quickest to embrace the marketing potential thereof.
Traditional gender roles have changed with more women working, and dual-working households coupled with fast-paced work lives, creating a time-poor and more independent female consumer. Observed in particular in Southern Europe, Latin America and the Middle East, the changing roles have seen a driving demand for e-commerce with less time at hand or inclination to leave the home; resulting in retailers and suppliers having to manage the increased demand for on-the-go, ready to cook and easy-to-prepare products. Keeping abreast of this is Carrefour and Google which are launching a voice-based grocery shopping experience through Google Assist, with orders placed using voice. Google has also launched a new video shopping platform called Shoploop, which enables users to scroll through under 90 second videos demonstrating or promoting a product.
It is clear, that retailers will be looking to raise their profiles beyond format and price to differentiation through services, personalisation, online and in-store experiences, and tailored ranges and assortments. The key factors they choose to upweight in their positioning will need to remain relatively consistent across all the formats to maintain brand consistency. This sounds simpler than it is, however, as each format operates within related cost bases. The critical selection of where to play and where not to, will be a key component when it comes to decision making for retailers.
Other initiatives include retailers investing in private label ranges to manage their cost base, creating a point of differentiation, and tailoring their range and assortment by format and location. To do so effectively will require a significant data investment and insights that enable this level of customisation. Manufacturers will need to align their key account management, category plans and promotional activity to the respective retailer’s positioning to ensure they match the right product ranges and initiatives to the right retailers.
Clarity in positioning and working in close collaboration, will become the key criteria for success for both retailers and manufacturers in a more omni-channel world.
Michael Smollan is Chief Growth & Innovation Officer of Smollan. Smollan is a leading retail solutions company that delivers growth for retailers and brand owners across five continents by covering every aspect of how their brand is managed at the point of purchase, from field sales to in store and digitally. Smollan partners with brand owners and retailers to deliver accelerated growth by increasing reach, driving availability and visibility, increasing efficiency and delivering superior shopper experiences; operating across emerging and developed markets, in modern and general trade, and across physical and digital channels.
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